The Lesson of Trump vs. Powell

Wall Street Journal ^ | April 17, 2025 | WSJ Editorial Board

[karpov]

President Trump’s tariff war isn’t going well, with market ructions and evidence of a slowing economy. So it was probably inevitable that Mr. Trump would demand that the Federal Reserve ride to his rescue by cutting interest rates. The President took to social media Thursday morning to blast Fed Chairman Jerome Powell with his familiar nuance.

“Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!’ Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS,” Mr. Trump wrote. “Too Late should have lowered Interest Rates, like the ECB [European Central Bank], long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!”

Mr. Trump was reacting to Mr. Powell’s remarks Wednesday that the President’s tariffs complicate the Fed’s job of maintaining stable prices with low unemployment. “The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Mr. Powell told the Economic Club of Chicago.

The problem for Mr. Trump is that Mr. Powell spoke the truth. Tariffs are a tax, which means higher prices for tariffed goods. Mr. Trump has imposed a minimum tariff on the world of 10%, which is roughly four times the previous average U.S. tariff rate of 2.4%.

That will be at least a one-time increase in inflation for imported goods that will flow into the Labor Department’s consumer-price data. The hard decision for the Fed is whether to look past that one-time increase and assume it won’t become part of consumer inflation expectations.

[karpov]

full article

Letting Presidents set monetary policy is a bad idea, since they will tend to prefer easy money for its short-term benefits, at the cost of higher inflation.

[Bookshelf]

Who is ‘they’?

[stig]

Letting Presidents set monetary policy is a bad idea,

But letting an unelected political hack like Powell set rates is OK?

[The Sons of Liberty]

President Trump’s tariff war isn’t going well

Who says?

Would they rather President Trump sit back and let the debt grow until we default, or make no attempts to bring manufacturing back to America, not to mention doing nothing about unfair trade? All of that is a mental incompetent strategy a la Joe Biden.

Trump is taking the tough road that will pay off in the long run.

[Gen.Blather]

My portfolio is within a few bucks of its high before the tariff fight. Now granted, I don’t have any junk companies that aren’t making money. They all actually have a business with products and customers. I have one foreign company, Rheinmetall.

There are scads of companies listed that I wouldn’t touch because they rely on fads, or scams, or techie stuff that probably will never materialize. Those are the ones doing badly.

[traderrob6]

Then Trump would be a demonstrable illustration of precisely the opposite of your “thumb rule”.

[HYPOCRACY]

The WSJ supporting Powell? Who could have seen that coming?

[JayGalt]

WSJ spins the narrative. They have lost their integrity. Powell has been a disater for America.

[escapefromboston]

End the Fed

[Sgt_Schultze]

You mistakenly believe the Fed is a non-partisan operation. For the entire 8-year reign of Obama, the Fed kept the rate near ZERO - something that had never happened in history. They intentionally propped up the Kenyan’s administration, making nearly the entire aggregate growth during his term a function of monetary policy. Once Trump began in 2017, the Fed jacked the rates again.

[AbolishCSEU]

BINGO!

[abbastanza]

WSJ is a rag.

[zeestephen]

The USA political and financial opponents of Trump Tariffs always make the same argument...

They make a lock step - and completely unproven - claim that 100% of American consumers and American entrepreneurs will obediently take a knee and pay higher prices for foreign goods.

Baloney!

Millions of USA consumers will stop buying certain foreign products, or they will purchase substitute products.

USA entrepreneurs will attack higher foreign prices from a dozen different angles.

[Georgia Girl 2]

Yes by all means lets let a private central bank set our monetary policy. Since the main objective of the Federal Reserve is the transfer of middle class wealth to wall street. 🙄

[SoConPubbie]

Don’t look now but your NeverTrumper bias is showing again.

[Brian Griffin]

The Trump tariffs are helping ensure that the Trump tax cuts can continue.

[faucetman]

Wall Street URINAL. Worse than The Hill.

[E. Pluribus Unum]

The Wall Street Urinal says, without evidence.

[Robert DeLong]

Yu act as if this nation was in great shape until Trump came along.

The WSJ is a joke, and you are rapidly eclipsing them as the joke with your laughable posts all coming from the same source.

Once again, the Wall Street Journal was created to promote Wall Street, period. If Wall Street is not doing well then the President is at fault in their mind. They ignore that the country has been going to hell in a handbasket for at least 4.5 decades now.

This wasn't from Trump's doing. Trump hasn't played any role whatsoever in the disappearing middle-class, and the growing gap between the extremely rich and the abject poor.

I guess you were on the road to incredible wealth, but now your mediocre stocks are taking a hit.

Taking the country back is going to involve pain, but without pain, there is no real gain. You do realize that once this nation falls, you will end up with nothing anyway right?

Fight, fight, fight, or you had better start learning Chinese, or some other language, because English is disappearing as we flood this nation with people from around the globe.

You say you are a chess fan, but apparently you dabble in:

[Cobra64]

It is now, and has been for about a decade. I remember growing up when it was the premiere, one and only source of factual newspaper.